Asian stocks up, Shanghai jumps on regulator comments

PHOTO: Asian stocks up, Shanghai jumps on regulator comments

HONG KONG - Asian shares were mostly higher Monday, led by a surge on the Shanghai index after the securities regulator raised hopes for increased foreign investment in China's stock market.

The euro made further gains after upbeat comments last week by the European Central Bank chief, and the yen slid again after reports that the Bank of Japan and government were poised to set a two-per cent inflation target.

Shanghai surged 3.06 per cent, or 68.74 points, to 2,311.74 after the head of China's securities regulator, Guo Shuqing, said the investment quota for foreigners in the domestic equity market could be increased 10-fold.

Hong Kong rose 0.64 per cent, or 149.19 points, to 23,413.26, Seoul added 0.52 per cent, or 10.37 points, to 2,007.04 and Sydney closed up 0.22 per cent, or 10.2 points, at 4,719.7.

But Singapore slipped 0.31 per cent, or 9.91 points, to 3,206.59, pulled down by property stocks after the government introduced new measures at the weekend to cool the local market.

Tokyo was closed for a public holiday.

At a Hong Kong conference Monday, Guo said at present investment by foreign institutions - individuals are barred - accounts for "just 1.5 or 1.6 per cent" of China's A-share market, stock denominated in the domestic yuan currency.

He said the quota could be increased 10-fold in an effort to boost the stock market, without elaborating.

There was no clear lead from Wall Street, where stocks closed in mixed territory on Friday.

The Dow Jones Industrial Average was up 0.13 per cent, the broad-based S&P 500 was flat, while the tech-heavy Nasdaq Composite rose 0.12 per cent.

Investors were looking ahead to a speech by US Federal Reserve chief Ben Bernanke later Monday.

Minutes from the December meeting of Fed policymakers showed they were divided over how long the central bank should continue asset purchases.

But dealers thought Bernanke was likely to put an end to speculation that US policymakers may end the quantitative-easing programme, with expectations about his comments pushing down the dollar.

"I'd be shocked if he said anything other than they're buying bonds for the long haul," said Davis Scutt, a currency trader at Arab Bank in Sydney.

After tumbling Friday when the Japanese government unveiled a stimulus package, the yen slid further as reports said the Bank of Japan and the government would jointly set a two-per cent inflation target following pressure from new Prime Minister Shinzo Abe.

The two sides are to finalise a joint statement on monetary measures in time for the central bank's policy meeting on January 21-22, the Asahi Shimbun reported.

A weaker yen helps the country's many exporters, as it makes their products cheaper abroad.

The euro has been surging since Thursday when ECB chief Mario Draghi said there was "a significant improvement in financial market conditions" in the single currency bloc.

On foreign exchange markets in Asian afternoon trade, the euro was at US$1.3387, compared to US$1.3341 in the US late Friday. The dollar was at 89.61 yen from 89.18 yen, and the euro traded at 119.96 yen from 119.00 yen.

Oil was up. New York's main contract, light sweet crude for delivery in February, rose 69 cents to US$94.25 a barrel in the afternoon, and Brent North Sea crude for February delivery gained 43 cents to US$111.07.

Gold was at 1,669.90 at 0935 GMT compared with US$1,669.80 late Friday.

In other markets:

Wellington rose 0.54 per cent, or 22.16 points to 4,153.92.

Fletcher Building added 1.61 per cent to NZ$8.86, Telecom Corp rose 1.08 per cent to NZ$2.335 and The Warehouse gained 0.66 per cent to NZ$3.07.

Taipei was flat, edging up 4.82 points to 7,823.97.

Taiwan Semiconductor Manufacturing Co gained 1.0 per cent at Tw$102.0 while leading smartphone maker HTC climbed 5.1 per cent to Tw$291.0.

Manila advanced 0.70 per cent, or 42.15 points, to 6,093.90.

Top-traded Bloomberry Resorts Corp. gained 1.54 per cent to 13.16 pesos while BDO Unibank rose 2.46 per cent to 77 pesos.